CoStar Group Reports Record Third Quarter Revenue of $952 Million; Profitability Surges with Net Income of $74 Million; Highest Ever Adjusted EBITDA of $229…
COSTAR GROUP, INC. (CSGP) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 CoStar Group Reports Record Third Quarter Revenue of $952 Million; Profitability Surges with Net Income of $74 Million; Highest Ever Adjusted EBITDA of $229 Million, Doubling Year-over-Year; Raises Full-Year 2026 Adjusted EBITDA Guidance ARLINGTON, VA – October 27, 2
Facts are quoted from the filing text and checked against it.
How this was made
The 30-second read
Why it matters
The earnings beat and raised guidance provide a fresh, material catalyst for the stock, likely prompting buying interest.
Market read
The report delivers new, material financial data that can move the stock and influence the broader real‑estate data sector.
What to watch
Potential integration costs from recent acquisitions (Zonda, Vexcel) could temper margin expansion.
CoStar Group Reports Record Third Quarter Revenue of $952 Million; Profitability Surges with Net Income of $74 Million; Highest Ever Adjusted EBITDA of $229 Million, Doubling Year-over-Year; Raises Full-Year 2026 Adjusted EBITDA Guidance
Third-quarter revenue increased 14% year-over-year to $952 million while net income reached $74 million versus a $31 million loss, Adjusted EBITDA doubled to $229 million, and the company increased full-year revenue, Adjusted EBITDA and Adjusted EPS guidance.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended September 30GAAP | $952M | – | 14% |
| Revenue, nine months ended September 30GAAP | $2.77B | – | – |
| Net new bookings, third quarter of 2026other | $37M | – | – |
| Cost of revenue, three months ended September 30GAAP | $211M | – | – |
| Gross profit, three months ended September 30GAAP | $741M | – | – |
| Selling and marketing expense, three months ended September 30GAAP | $366M | – | – |
| Software development expense, three months ended September 30GAAP | $109M | – | – |
| General and administrative expense, three months ended September 30GAAP | $138M | – | – |
| Customer base amortization, three months ended September 30GAAP | $44M | – | – |
| Total operating expenses, three months ended September 30GAAP | $657M | – | – |
| Income (loss) from operations, three months ended September 30GAAP | $84M | – | – |
| Net income (loss), three months ended September 30GAAP | $74M | – | up $105 million year-over-year |
| Earnings per share - diluted, three months ended September 30GAAP | $0.18 | – | – |
| Weighted-average outstanding shares - diluted, three months ended September 30GAAP | 401.9M | – | – |
| EBITDA, three months ended September 30non-GAAP | $179M | – | up $166 million year-over-year |
| Adjusted EBITDA, three months ended September 30non-GAAP | $229M | – | doubling from the prior year period |
| Adjusted Net Income, three months ended September 30non-GAAP | $153M | – | up 59% year-over-year |
| Adjusted EPS, three months ended September 30non-GAAP | $0.38 | – | up 65% year-over-year |
| Net income (loss), nine months ended September 30GAAP | $132M | – | – |
| Income (loss) from operations, nine months ended September 30GAAP | $163M | – | – |
| Earnings per share - diluted, nine months ended September 30GAAP | $0.32 | – | – |
| EBITDA, nine months ended September 30non-GAAP | $417M | – | – |
| Adjusted EBITDA, nine months ended September 30non-GAAP | $545M | – | – |
| Adjusted Net Income, nine months ended September 30non-GAAP | $375M | – | – |
| Adjusted EPS, nine months ended September 30non-GAAP | $0.92 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Commercial Real Estate, three months ended September 30Includes CoStar revenue of $344 million, LoopNet revenue of $89 million, and Other Commercial Real Estate revenue of $59 million. | $492M | – | – |
| Residential Real Estate, three months ended September 30Not specified. | $460M | – | – |
| Commercial Real Estate EBITDA, three months ended September 30Segment EBITDA. | $163M | – | – |
| Residential Real Estate EBITDA, three months ended September 30Segment EBITDA. | $16M | – | – |
| Commercial Real Estate Adjusted EBITDA, three months ended September 30Segment Adjusted EBITDA. | $180M | – | – |
| Residential Real Estate Adjusted EBITDA, three months ended September 30Segment Adjusted EBITDA. | $49M | – | – |
fourth quarter and full year 2026 outlook
- RevenueFourth quarter of 2026: $976 million to $996 million. Full year 2026: $3.75 billion to $3.77 billion.
- Tax rate26% for the full year and the fourth quarter of 2026
- NoteFull-year 2026 Adjusted EBITDA: $820 million to $840 million.
- NoteFourth-quarter 2026 Adjusted EBITDA: $275 million to $295 million.
- NoteFourth-quarter 2026 Adjusted EBITDA margin: 29% at the midpoint of the range.
- NoteFull-year 2026 revenue growth: approximately 16% year-over-year at the midpoint of the range.
- NoteFourth-quarter 2026 revenue growth: approximately 10% year-over-year at the midpoint of the range.
- NoteFull-year 2026 Adjusted EPS: $1.38 to $1.41 based on 405 million shares.
- NoteFourth-quarter 2026 Adjusted EPS: $0.46 to $0.50 based on 400 million shares.
- NoteFourth-quarter 2026 GAAP net income: $95 million to $109 million.
- NoteFull-year 2026 GAAP net income: $226 million to $241 million.
- NoteFourth-quarter 2026 EBITDA: $233 million to $253 million.
- NoteFull-year 2026 EBITDA: $651 million to $671 million.
- NoteFourth-quarter 2026 Commercial Real Estate Adjusted EBITDA: $177 million to $187 million.
- NoteFourth-quarter 2026 Residential Real Estate Adjusted EBITDA: $98 million to $108 million.
- NoteFull-year 2026 Commercial Real Estate Adjusted EBITDA: $690 million to $700 million.
- NoteFull-year 2026 Residential Real Estate Adjusted EBITDA: $130 million to $140 million.
- Note2028 Adjusted EBITDA target: $1.25 billion.
Capital returns
- Repurchases of stock were $(668) million for the nine months ended September 30, 2026.
- Repurchase of restricted stock to satisfy tax withholding obligations was $(24) million for the nine months ended September 30, 2026.
What drove it
- Revenue was $952 million, up 14% over revenue of $834 million for the quarter ended September 30, 2025.
- Net new bookings were $37 million for the quarter.
- Selling and marketing expense was $366 million, compared with $418 million in the prior-year quarter.
- General and administrative expense was $138 million, compared with $157 million in the prior-year quarter.
- Commercial Real Estate Adjusted EBITDA was $180 million and Residential Real Estate Adjusted EBITDA was $49 million.
- The company stated that total anticipated cost savings this year are approximately $150 million versus original guidance.
- The company stated it identified potential additional savings of at least $200 million expected to be realized over the next 12 to 18 months.
Concerns
- Cash and cash equivalents declined to $500 million at September 30, 2026 from $1,633 million at December 31, 2025.
- Cash paid for acquisitions, net of cash acquired was $(789) million for the nine months ended September 30, 2026.
- Long-term debt, net was $994 million at September 30, 2026.
- The company cited risks related to realizing benefits from Matterport, Domain and Zonda acquisitions and completing or realizing expected benefits from the Vexcel acquisition.
- The company cited risks from AI technologies, economic uncertainty, real estate market cyclicality, competition, data availability, cyberattacks and litigation.
What to watch
- Fourth-quarter revenue guidance of $976 million to $996 million.
- Fourth-quarter Adjusted EBITDA guidance of $275 million to $295 million and a 29% margin at the midpoint of the range.
- Execution against approximately $150 million of anticipated cost savings this year and at least $200 million of identified potential additional savings over the next 12 to 18 months.
- Commercial Real Estate and Residential Real Estate Adjusted EBITDA guidance for the fourth quarter of 2026.
- Cash use for acquisitions, campuses, other property and equipment, and stock repurchases.
Balance sheet and cash flow
- Cash and cash equivalents were $500 million at September 30, 2026, compared with $1,633 million at December 31, 2025.
- Long-term debt, net was $994 million at September 30, 2026, compared with $993 million at December 31, 2025.
- Total assets were $10,265 million at September 30, 2026, compared with $10,538 million at December 31, 2025.
- Deferred revenue was $250 million at September 30, 2026, compared with $205 million at December 31, 2025.
- Net cash provided by operating activities was $455 million for the nine months ended September 30, 2026, compared with $268 million for the nine months ended September 30, 2025.
- Cash paid for acquisitions, net of cash acquired was $(789) million for the nine months ended September 30, 2026, compared with $(2,347) million for the nine months ended September 30, 2025.
- Purchases of property, equipment, and other assets for new campuses were $(134) million for the nine months ended September 30, 2026, compared with $(246) million for the nine months ended September 30, 2025.
- Purchases of property, equipment, and other assets were $(60) million for the nine months ended September 30, 2026, compared with $(77) million for the nine months ended September 30, 2025.
- Net cash used in investing activities was $(981) million for the nine months ended September 30, 2026, compared with $(2,750) million for the nine months ended September 30, 2025.
- Net cash used in financing activities was $(706) million for the nine months ended September 30, 2026, compared with $(162) million for the nine months ended September 30, 2025.
- Cash, cash equivalents, and restricted cash at the end of the period was $500 million at September 30, 2026, compared with $2,035 million at September 30, 2025.
Analysis
CoStar reported record third-quarter revenue of $952 million, up 14% from $834 million in the prior-year period. Net new bookings were $37 million. Commercial Real Estate revenue was $492 million, including $344 million at CoStar, $89 million at LoopNet and $59 million in Other Commercial Real Estate. Residential Real Estate revenue was $460 million. The release also reported 121 million average monthly unique visitors in the third quarter of 2026.
Profitability improved sharply. GAAP net income was $74 million, compared with a net loss of $31 million in the prior-year quarter, while income from operations was $84 million compared with an operating loss of $51 million. EBITDA was $179 million compared with $13 million, and Adjusted EBITDA was $229 million compared with $114 million. Adjusted Net Income rose to $153 million from $96 million and Adjusted EPS increased to $0.38 from $0.23.
The expense profile reflected the company's efficiency initiative. Selling and marketing expense declined to $366 million from $418 million and general and administrative expense declined to $138 million from $157 million, while revenue increased. Commercial Real Estate produced $180 million of Adjusted EBITDA and Residential Real Estate generated $49 million of Adjusted EBITDA, compared with a $(69) million Adjusted EBITDA result in Residential Real Estate in the prior-year quarter. The company cited approximately $150 million of total anticipated cost savings this year versus its original guidance and identified at least $200 million of potential additional savings over the next 12 to 18 months.
Capital allocation and liquidity remain important follow-through items. For the nine months ended September 30, operating cash flow was $455 million, while acquisitions used $(789) million, campus-related property and equipment purchases used $(134) million, other property and equipment purchases used $(60) million, and stock repurchases used $(668) million. Cash and cash equivalents were $500 million at September 30, 2026, and long-term debt, net was $994 million.
Management raised its full-year 2026 outlook. Revenue guidance is $3.75 billion to $3.77 billion and Adjusted EBITDA guidance is $820 million to $840 million. Fourth-quarter guidance calls for revenue of $976 million to $996 million, Adjusted EBITDA of $275 million to $295 million, and Adjusted EPS of $0.46 to $0.50. The company stated that the full-year Adjusted EBITDA midpoint increased by $30 million from its July 2026 guidance and cumulatively by $60 million from its February 2026 guidance.
Management, verbatim
CoStar Group generated outstanding profitability growth in the third quarter, delivering on our commitment to expand margins as we exit a period of investment.
Andy Florance, Founder and Chief Executive Officer of CoStar Group
Adjusted EBITDA doubled year-over-year and was considerably above the high end of our $190 million to $210 million guidance range.
Andy Florance, Founder and Chief Executive Officer of CoStar Group
Our ongoing deep expense review has identified potential additional savings of at least $200 million that we believe will improve efficiency without sacrificing revenue growth.
Andy Florance, Founder and Chief Executive Officer of CoStar Group
Not in the filing
stated, not guessed- Gross margin for the third quarter of 2026 and comparable periods was not reported.
- Free cash flow was not reported.
- Third-quarter operating cash flow was not reported.
- Dividend amount and dividend guidance were not reported.
- A prior outlook document was not provided; therefore, row-by-row comparisons of actual results with prior guidance cannot be completed.
- Prior-year and prior-quarter percentage changes for most income statement and segment metrics were not printed.
- Revenue growth rates for individual Commercial Real Estate and Residential Real Estate segments were not printed.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
CoStar Group filed an 8‑K announcing Q3 results and updated its 2026 outlook.
Ticker impact
CoStar Group reported record Q3 revenue of $952M, net income of $74M and raised full‑year 2026 Adjusted EBITDA guidance to $820‑$840M.
likely upward pressure as investors price in the raised guidance and record earnings.
The company beat prior quarter results and lifted its full‑year EBITDA outlook, a material positive catalyst for a mid‑cap stock.
Market effects
Strengthens the real‑estate data and analytics sector, supporting peers with similar SaaS models.
Positive for U.S. technology and data‑services stocks.
Highlights AI‑driven profitability trends that may influence global tech valuations.
Counterpoint
If the raised guidance is already priced in, the stock could face a short‑term pullback.
Key entities
- companyCoStar Group, Inc.
Provider of online real‑estate marketplaces and analytics.
